Happy New Year. We hope you have a happy and healthy 2023!
The Toronto Regional Real Estate Board (TRREB) has released the housing data for 2022. As we know, there was a notable adjustment in sales activity this year compared to the previous record-setting year. Housing affordability issues were exacerbated by rising interest rates and a lack of new listings.
With 75,140 transactions reported through the MLS System in 2022, sales were down 38.2% compared to 2021. For broader context, this was the lowest annual total since 2008, and well below the 10-year average of 94,400 sales. The annual average sales price was $1,189,850, an increase of 8.6% from 2021.
The housing story of the year was the sustained rise in lending rates and its impact on sales and pricing. Following a strong start to the year, sales trended lower in the spring and summer as the cost of borrowing hampered affordability. Selling prices adjusted downwards to offset the cost of lending. By July, the average sales price was down approximately 20% from the February high, before flattening out through the remainder of the year.
While sales and prices have received the greatest attention, low supply continues to challenge the market, and also explains why prices have found more support in the second half of the year. New listings for the year totaled 152,873, down 8.2% compared to 2021.
Focusing on December, there were 3117 sales for the month, down 48.2% year-over-year. The average sales price was $1,051,216, down 9.2%. New Listings were down 21.3% and with Active Listings now at 8692, there is currently a 2.78-month supply within the TRREB region.
We are now at the beginning of a new year and the market continues to evolve. Rising rates and low supply remain a challenge. New legislation prohibiting foreign buyers from purchasing real estate will also add a layer of complexity as the buyer pool shrinks.